Money Supply

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Dictionary Says

Definition of 'Money Supply'

The entire quantity of bills, coins, loans, credit and other liquid instruments in a country's economy.
Investopedia Says

Investopedia explains 'Money Supply'

Money supply is divided into multiple categories - M0, M1, M2 and M3 - according to the type and size of account in which the instrument is kept. The money supply is important to economists trying to understand how policies will affect interest rates and growth.

Related Definitions

  • M1

    A category of the money supply that includes all physical money such as coins and currency; it also includes demand deposits, which are checking accounts, and Negotiable Order of ...
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  • M2

    A category within the money supply that includes M1 in addition to all time-related deposits, savings deposits, and non-institutional money-market funds.
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  • M3

    The category of the money supply that includes M2 as well as all large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid ...
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    • Monetary Policy

      The actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary ...
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    • Narrow Money

      A category of money supply that includes all physical money like coins and currency along with demand deposits and other liquid assets held by the central bank. In the United States ...
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    • Quantitative Easing

      A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money ...
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    • Federal Reserve Float

      Refers to the over-estimation of the country's money supply due to uncleared checks showing as an asset on the books of both the receiving and sending institution. This "double ...
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    • Monetary Theory

      A set of ideas about how monetary policy should be conducted within an economy. Monetary theory suggests that different monetary policies can benefit nations depending on their unique ...
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    • M0

      A measure of the money supply which combines any liquid or cash assets held within a central bank and the amount of physical currency circulating in the economy. In the United Kingdom, ...
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    • Liquidity Squeeze

      When concern about the short-term availability of money causes reluctance among financial institutions to lend out money from their reserves. This hold on reserves causes the interbank ...
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